Fun Fact Friday


In observance of Easter, the IBAT office will close at noon on Friday, March 29, 2013. We will reopen for regular hours Monday, April 1st (no joke!).


For a history of Easter, click here.

Capitol Comments

Articles in this issue include:

  • CFPB
    publishes preliminary list of rural and underserved counties;
  • Fraudulent
    OCC correspondence sent to consumers;
  • CFPB
    field hearing in Des Moines, Iowa;
  • Federal
    bank regulatory agencies propose changes to Call Report;
  • FinCEN
    reminder on new report format;
  • Fed
    releases stress test results of the largest bank holding companies;
  • FTC
    releases top complaint categories in 2012;
  • Upcoming
    OCC directors\' workshop;
  • Big
    Banks wrongfully foreclose on hundreds of military members;
  • FinCEN
    advisory on tax refund fraud and related identity theft;
  • NMLS
    makes MLO-reported disciplinary action public;
  • HUD:
    New fair housing mobile app;
  • OCC
    marks sesquicentennial year;
  • CFPB
    Consumer Advisory Board holds first meeting;
  • OFAC
    Financial Industry Symposium;
  • Bank
    and credit card customers billed $25 million without consent;
  • Three
    new business transactions offered through FDICconnect;
  • OMB
    revised delineations of statistical areas;
  • OFAC
    releases new SDN search tool;
  • FDIC
    community affairs webinar on programs that support export lending to small
  • FinCEN
    issues guidance on using virtual currencies;
  • Free
    online safety videos from the FTC;
  • FDIC
    releases list of its most popular consumer protection articles;
  • Fed
    report on interchange fee revenue; and
  • Latest
    Beige Book released.

Mortgage Lending Compliance

is certain that the new mortgage lending compliance requirements issued by the
CFPB will have a considerable impact upon community banks across Texas.
 Of the seven major mortgage lending compliance initiatives required under
Dodd-Frank, six have been finalized. Three of the four have an exemption either
finalized or proposed targeting small, rural lenders. This single page handout is intended to help you
understand the practical considerations of the exemption qualifications in
general and what specifically is being exempted.

Alternative "Rural" Definition

The Consumer Financial Protection Bureau (CFPB) recently completed the difficult task of defining the word "rural" in implementing the rural exemption of the Dodd-Frank Act\'s HPML escrow requirement.  While we commend the CFPB\'s efforts in considerably broadening the definition originally proposed by the Federal Reserve in 2011, our research concludes that the CFPB\'s definition (and the Federal Reserve\'s before it) relies on Census Bureau data that was not intended to delineate rural areas. In fact, the Census Bureau warns federal agencies against using this data to determine rural areas.

IBAT Deputy General Counsel Shannon Phillips Jr. prepared a memo describing the shortcomings of the CFPB\'s definition and proposing a standard delineating rural from urban that would nearly triple the number of Texas residents living in rural areas and almost doubling the number of Texas community banks chartered in rural areas. IBAT is seeking input from its members as it prepares to present this proposal to the CFPB.

Week in Review

Rather than describe the zeal with which Americans follow college basketball this time of year, "March Madness" might be a term best used to portray the attitudes of Cypriot bank customers as they lined up [Friday] in front of financial institutions that were open for business for the first time in almost two weeks. And speaking of hoops, there are several that have to be jumped through by both the banks and their customers as a result of a European Union bailout package that will see creditors and uninsured depositors take a hit, but leave the holdings of small savers intact. Temporary restrictions will also limit the amounts that can be withdrawn and set a cap on the amount that can be transferred out of the country. The fragility of the deal and uncertainty over what might be coming next, reminded markets that Euro- risk is alive and well. Safety-seeking investors pushed U.S. Treasury bond prices significantly higher [Thursday] as the yield on the Benchmark Ten Year fell to 1.84% from its week-opening 1.91%... Read more in the Baker Market Update.

2013 Main Street Tour

Last week, IBAT staff once again joined Texas First Lady Anita Perry for her Main Street Tour, honoring three cities that were welcomed into the Texas Main Street program, an effort of the Texas Historical Commission dedicated to revitalization of historic downtowns. This year\'s Main Street cities, Childress, San Augustine and Cuero, joined 81 other cities currently enrolled in the program.  

On the tour IBAT was joined by community bankers in each city, including:

  • Larry and Sharon Johnson of First Texas Bank and Trust of Childress;
  • Richard Sims of Wellington State Bank;
  • Kenny Fowler of First Bank and Trust East Texas;
  • Linda Gilcrease of Commercial Bank of Texas;
  • Peggy Hardy of Texas Bank and Trust;
  • John D. Howard and Shay Iacoponelli of Trust Texas Bank, SSB; and
  • David Kleinecke of Cuero National Bank.  

"IBAT  is an organization dedicated to serving banks that make Main Street a reality in so many Texas communities," said IBAT President and CEO Chris Williston.  "Our  support and financial involvement as the principle sponsor of the Texas Main Street program is a statement that Main Street is here to stay, and so is Main Street banking."

LD Regional Meetings

The IBAT Leadership Division would like to extend an invitation to all IBAT members in Region 5 and Region 8 to attend regional meetings on April 18.  

Region 5 will co-host a golf tournament and dinner with the Northeast Bankers Association at the Land\'s End Golf Course in Yantis.  The golf tournament begins at 1 PM with dinner following at 5:30 pm. The featured dinner speaker at the event will be Chris Williston, IBAT President and CEO. Click here for more information and to register for the Region 5 meeting. 

Region 8 will host an educational seminar and luncheon at the Texas Baptist Camp and Conference Center on Lake Brownwood from 9:00 am until 1:00 pm.  Presenters include Melissa Kinion of The Genesis Group; Bert Massey, attorney and former Brownwood mayor; and Gary Welsh with Condley & Company.  CPAs and CRCMs will receive CE credit for attending. Click here for more information and to register for the Region 8 meeting.

Message from the Governor

Governor Perry has issued the following directive:

The State of Texas has lost a valued elected official with the brutal murder of District Attorney Mike McLelland and his wife Cynthia. As a mark of respect for this brave public servant and his wife, it is fitting that flags in Texas be lowered to half-staff.

Therefore, pursuant to Chapter 3100 of the Texas Government Code and Title 4 of United States Code, as Chief Executive Officer and Governor of the State of Texas, I do hereby direct the lowering of all State of Texas and United States flags under the control of the state to half-staff in memory of the Honorable Mike McLelland and his wife Cynthia, on Thursday, April 4, 2013. Flags should be returned to full staff on Friday, April 5.

Our prayers of comfort are extended to the McLelland family in their time of grief, and I urge all Texans to remember and honor Mike and Cynthia\'s service to the State of Texas.


Rick Perry


Thanks to all of you who have completed or are still conducting your Bank PAC Drive.  We\'re off to a great start.  With both the Texas Legislature and the US Congress in session, we are all on deck to protect the interests of True Texas Community Banks and making sure our industry is represented in the financial marketplace.  Banks that complete their PAC Drives by Friday, April 26, will be put in a drawing for a barbecue cookout hosted by the IBAT Staff.

We\'ve added a new tool this year for those of you who would like to contribute to the IBAT PAC online using your credit card.

Political campaigns have become increasingly expensive.  You, as a community banker, are our one and only focus as we work to elect those men and women on both the state and federal levels who understand and appreciate the importance of community banks.  We need and appreciate your support of the industry through your contributions to the IBAT PAC and IBAT FedPAC.

Teaching Excellence Award

The Independent Bankers Association of Texas (IBAT) recently presented
Sweetwater High School teacher Skylar Houston with its Teaching
Excellence in Financial Literacy Award. Houston is one of three award
recipients from across the state. He was presented the award on Thursday
at Sweetwater High School\'s regular monthly faculty meeting.

The Teaching Excellence in Financial Literacy Award program is hosted by
the IBAT Education Foundation. The program seeks to recognize teachers
from local schools who are teaching financial education in innovative
ways. Previous award winners are helping to create the curriculum for
the IBAT Teach the Teacher Program with the ultimate goal of giving
students the foundation necessary to make sound financial decisions for
the duration of their lives. The award program is now in its fourth

"Skylar Houston personifies what we look for in a recipient of this
award," Chris Williston, IBAT president and chief executive officer,
said. "He truly has a passion for teaching financial education and his
students respond. His goal is to set young adults on a path to financial
success, and that is exactly what he does."
As the main component of his financial education curriculum, Houston
teaches students about personal finance through personal experiences,
interactive research and guest speakers. He ensures that when his
students leave his classroom they are knowledgeable about personal
investments, how to plan their financial future and understand the value
of credit. He often uses examples from his own life when teaching a

Houston teaches government and economics to seniors and has been with
Sweetwater High School for four years. He was nominated by Mike
Fernandez, Vice President of Texas National Bank. Houston received a
cash award as part of his recognition. Members of the Foundation Board
served as judges for the competition.
Formed in 1974, the Independent Bankers Association of Texas (IBAT)
represents Texas community banks. The Austin-based group is the largest
state community banking organization in the nation, with membership
comprised of more than 2,000 banks and branches in 700 Texas
communities. Providing safe and responsible financial services to all
Texans, IBAT member bank assets range in size from $10 million to $20
billion with combined assets statewide of nearly $165 billion. IBAT
member banks are committed to supporting and investing in their local

Pictured from left to right: Sweetwater High School Principal Stacy
Jones, Mary Lange, Skylar Houston and Mike Fernandez.

The Affordable Care Act

plans to join Jay Kempton and Maria Robles-Meyers, Esq. for a free webinar, The Affordable Care Act (ACA): Fines,
Fees, Full Time and Deadlines: Avoid a Compliance Nightmare,
April 23rd from 10:00a.m. to 11:00a.m.  This webinar will cover:

  • How
    to achieve and maintain compliance for your bank
  • Play
    or Pay Fines: What you need to know to stay compliant
  • What
    is a "full time employee" and how do you calculate "full
    time equivalents?"
  • Coverage
    mandates & changes
  • Exchanges
    and how they will affect you
  • Learn
    what makes AHPT such an effective safe harbor for your bank
  • And
    much more!

Click here to register!

TWIA Concerns

comments in the press and in hearings at the Capitol last week raised concerns
about the solvency of the Texas Windstorm Insurance Association (TWIA).
Community bankers, in particular, expressed concerns that collateral in
fourteen Coastal counties would be impaired by the action. In response,
the Texas Department of Insurance (TDI) issued an explanation of what receivership and
rehabilitation would mean to policyholders and TWIA, specifically addressing
concerns about mortgages in affected counties. "Rehabilitation would not
change TWIA\'s ability to issue new policies, renew polices, or fulfill its
obligations under current policies," TDI explained.

a letter sent to the TWIA Board of Directors, the
Independent Insurance Agents of Texas (IIAT) requested that a decision on
receivership be suspended until the legislature has the opportunity to restore
proper funding. "Receivership at this time would only confuse
policyholders who have no other options for windstorm insurance, and interrupt
the flow of commerce on our coast unnecessarily," said IIAT Executive
Director David Vanderlinder.  

is monitoring ongoing action by both the Texas Legislature and the Texas
Department of Insurance on this issue.  

Here's to 24 More!

Congratulations to IBAT President and CEO Chris Williston who today celebrates his 24th anniversary at the Independent Bankers Association of Texas. 

Wire Transfer Procedures

With an increase in fraudulent voice or fax instructions resulting in unauthorized wire transfers from your customers\' accounts, it would be prudent to take a close look at your authentication/wire transfer procedures for your customer accounts.  If updates are needed, make sure you have personal contact with your customer\'s  authorized individual.  If clear authentication instructions are not spelled out for all means of communication, revise your procedure to include voice, fax AND email instructions.  

Some of these unauthorized transfers are sizable and they are happening in Texas, as well as other parts of the country. Several fraudulent transfers could have been stopped if bank personnel would have followed the bank\'s established procedures. Several of our members have been affected and fortunately many have been able to restore the money to the customer\'s account without a lengthy insurance claims process.  We want to remind you that all insurance policies have some type of authentication requirements and your written procedures, and your written agreements with each customer, are a key part of each and every insurance claim.  So please make sure your authentication procedures and written customer agreements are up to date, your staff is trained on those procedures and the procedures are followed.  

Regulatory Burden

Borrowing a page from the IBAT
songbook, Texas Banking Commissioner Charles Cooper makes a strong case for
federal banking regulators to use tiered regulation discretion in promulgating
consumer compliance laws.  His excellent BankThink opinion piece, which appeared in last Thursday\'s American Banker, cites
empirical evidence from the FDIC and the National Survey of Unbanked and Underbanked Households
demonstrating the reluctance of small banks to develop products that could
assist members of the underserved community due to the regulatory risks
associated with doing so.

Cooper observes that "regulations and supervisory processes that drive
financial services out of the mainstream banking system and into the shadow
need to be rooted out and made more reasonable."

Cooper\'s opinion piece comes at an opportune time as IBAT and ICBA continue to
pound the drum in DC for comprehensive regulatory relief and reform consistent
with community bank business models.

IBAT commends the Commissioner for his tireless and fearless leadership in
attempting to bring some semblance of reform and reasonableness to the
regulatory compliance overkill that has fallen disproportionately on community
banks and is stifling innovation and service to bank customers.

Compliance Education


April 1, every ICBA member can receive unlimited access to 50 of the most asked
for online compliance training courses at no cost through Sept. 30, 2013. The
curriculum for each compliance course has been written within the last 12
months and will be amended as required going forward. Each class is between 45
and 60 minutes long and has a test upon completion. CPE credits are awarded for
successful completion of classes with an 80 percent or higher score. Your
bank\'s administrator will be able to download a report listing each class your
employee has taken and passed which will provide verification of your employee\'s
continuing education for examination and record keeping.

community bank can continue the unlimited access through the following 12
months beyond Sept. 30, for just $99. So in effect, ICBA member banks will have
unlimited access to 50 of the most asked for online compliance training courses
for 18 months for just $99.

Click here for more information. 

Staff contact: Julie Courtney, jcourtney@ibat.org,

Baker Market Update

what\'s the big deal? Can\'t the bankers in Cyprus enjoy a little Spring Break
without the rest of the financial world becoming unhinged? Apparently not.
Banks on the island nation remain closed [Friday] as they have been all week in
an FDR-style holiday. While Cypriot government officials have been wrangling
with other officials from the European Union, the European Central Bank, and
the International Monetary Fund in an attempt to keep that nation\'s banking
system from turning into Cyprus mulch, fear of a run on the banks has kept
their doors closed. Negotiations continue [Friday] in an effort to prevent not
only a sovereign bankruptcy, but also a possible exit from the EU. Reactions by
credit markets remind us that the fear trade is alive and well as
safety-seeking funds found their way to the U.S. Treasury market. Bond
investors saw the yield on the Benchmark Ten Year Treasury Note fall to around
1.90% after beginning the week about ten basis points higher. With no economic
data releases on today\'s calendar, a slight sell-off has nudged that yield up
to around 1.92%... Read more in the Baker Market Update